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In wake of failed merger talks, South County Health promises a “major new program”

Chris Electric

South County Health is expected to make an announcement within a month of a “major new program,” said CEO Louis Giancola in the wake of the collapse of merger talks between the hospital and Yale New Haven Health, the parent of Westerly Hospital.

The announcement of the breakdown of talks that began some 10 months ago came early this week, but according to Giancola does not signal the end of cooperation between South County Health and Westerly Hospital.

“We’ll continue to collaborate with Westerly Hospital on our efforts to improve the health of the communities we serve,” Giancola said. “Both the Westerly and South County Boards have committed to trying to improve our approach to behavioral health issues.”

The only independent hospital in Rhode Island, Giancola said South County Health “will continue to invest in technology to grow local access to services,” promising the hospital will announce a major new program within the month.

South County Health already operates satellite medical and wellness facilities in Westerly and East Greenwich.

While negotiations between South County Health and Yale New Haven broke down, talks have formally started among Lifespan, Care New England, and Partners HealthCare of Boston, which has an agreement to acquire Care New England.

While the parties did not mention merger, there was considerable speculation in the media that merger is a possibility. If it happened, it would develop a very powerful healthcare network, including the leading hospital networks in Rhode Island and Massachusetts. Included in the Lifespan network is Rhode Island, Hasbro Children’s and Newport, among its facilities. Care New England includes Kent Hospital, Women & Infants, among its healthcare facilities, and Partners has numerous hospitals, including Brigham and Women’s and Mass General.

In the official statement, which was on each of the hospital network’s websites, it said: “Care New England and Partners HealthCare have approached Lifespan and will begin formal discussions to explore how all three health care providers might work together to strengthen patient care delivery in Rhode Island.” They would not elaborate.

Mergers and acquisitions in health care have become commonplace. According to a website, Healthcare Finance:

  • Many small, not-for-profit hospitals are struggling to stay afloat, shedding unprofitable services.
  • Healthcare reform and diminishing government reimbursements are forcing hospitals “to look at cost-effective ways of managing care. Merging plays an important role in allowing hospitals to experiment with innovative new forms of healthcare such as the accountable care organization”
  • “Merging can strengthen a facility’s relations with the community, helping with community health needs as well as the possibility of new service lines.”
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